The analysis, provided to News24.com.au by finance and property research firm OurTop10, compares building approval data with mortgage-stress modelling.
The findings provide a detailed picture of where Australia is falling short of its housing ambitions — and where the pressure on households is greatest.
Australia approved 205,249 dwellings in the 12 months to June 2026, according to the analysis, well short of the 240,000 annual pace implied by the National Housing Accord.
Under the National Housing Accord, the government promised to build 1.2 million homes by 2029.
But the country has fallen 34,751 homes behind the required approvals pace, with every month of the year falling below the target.
“The country is short 34,751 homes against its own target, and every month last year missed the pace. That is the run rate, not a blip,” OurTop10 head of research Mansour Soltani said.
Across the postcodes covered by the analysis, the number of mortgage-holding households modelled as being under financial strain increased 17.8 per cent in the year to June 2026.
The research found the same growth corridors repeatedly appearing among areas with both significant housing approvals and rapidly rising mortgage strain.
These included Logan and Ipswich in Queensland, Casey, Hume and Whittlesea in Victoria, Wanneroo in WA, Camden and Campbelltown in NSW and Playford, SA.
OurTop10 said 76 per cent of approvals in the most strained council areas were detached houses, compared with 64 per cent in comparable councils.
Mr Soltani said the analysis did not establish a causal link between new housing construction and mortgage stress.
“We are not saying that building homes causes mortgage stress. We tested that and the relationship is flat,” he said.
“What the data shows is that the supply we are managing to add is landing in the same growth corridors where households are already stretched, and it is overwhelmingly detached houses on the fringe rather than density near jobs.”
The research also raised concerns about the distinction between an approval and an actual home being delivered.
“Approvals are the optimistic number. An approval is permission to build, not a finished home. Some lapse, some are never started, and the rest take years,” the analysis said.
The modelling comes as the housing market enters a period of increasing volatility, with falling property prices, rising rents and mortgage stress.
The latest data showed national home values fell 0.9 per cent in August, marking a fifth consecutive monthly decline and taking values 3.6 per cent below the March peak.
The downturn has spread across the capital cities, with home values falling across 93 per cent of capital-city suburbs over the three months to August.
Sydney was hit hardest, with values falling 1.4 per cent in August and 7.1 per cent from their February peak.
Melbourne and Canberra each fell 1.1 per cent, while Brisbane declined 1 per cent month on month.
Cotality research director Tim Lawless said the deterioration was no longer confined to particular parts of the market.
“What started as a more concentrated easing across higher-value segments has now become a much more generalised softening,” he said.
“The combination of a sharp drop in demand and higher than average advertised stock levels is weighing more heavily on Australia’s largest housing market.”
Transaction activity has also weakened, with Brisbane, Perth and Sydney recording estimated sales volumes more than 20 per cent below levels a year earlier.
“The softer trend in values is underpinned by weaker transaction activity,” Mr Lawless said.
“Sales volumes are tracking well below both year-ago levels and the five-year average, which points to a clear reduction in buyer demand.”
The deterioration in prices and demand is occurring against a backdrop of persistently weak housing construction.
Earlier ABS figures showed total new dwelling commencements fell 11.2 per cent in the March quarter to 48,012 homes.
The commencements were well below the 60,000 dwellings required every quarter to remain on track for Labor’s National Housing Accord’s target of 1.2 million homes.
High-density starts fell 19.8 per cent to 19,116, while detached house commencements declined 3.5 per cent to 27,658.
Master Builders Australia chief economist Shane Garrett said the construction sector had been hit by a combination of economic and geopolitical pressures.
“Home building activity has been hurt by escalations in building costs and continued shortages of skilled tradies,” he said.
“Construction demand across housing, non-residential building and civil have all been squeezed by higher interest rates,” Mr Garrett said.
Industry confidence has subsequently come under pressure, while business failures have raised further questions about the industry’s ability to deliver the homes required.
Recent analysis found 67,401 construction businesses had shut over the past year, with 47 per cent of construction businesses expected to close within three years.
The National Housing Supply and Affordability Council has also pushed out its projected completion date for the Housing Accord target.
The August outlook forecast the national target would not be reached until December 2030.
Housing Minister Claire O’Neil had previously pointed to the number of homes under construction as evidence of progress.
“Fixing a problem generations in the making takes time, but we’re seeing good progress in housing supply,” Ms O’Neil said.
“This is about making sure we can keep building the homes Australians need, at the scale required.”
But shadow housing minister Andrew Bragg has argued the government’s housing policies were contributing to the deterioration in supply and market confidence.
Mr Bragg told News24.com.au annual housing completions have fallen from about 200,000 a year under the Coalition to about 170,000 under Labor.
“Higher taxes, higher costs and less investment will only make that worse,” Mr Bragg said.
“Labor has already admitted it will miss the housing target by more than 220,000 dwellings. No state or territory is on track.”
Mr Bragg has also criticised the government’s budget measures affecting property investment, arguing they will reduce rather than increase the supply of new homes.
“The budget tax hikes (on negative gearing and capital gains tax) resulted in 35,000 fewer houses over 10 years,” he said.
“While its attack on self-managed super funds could wipe out at least 4,000 property transactions each year, with industry estimates putting the figure closer to 16,000.
“So in total, that’s at least 75,000 dwellings cut from supply over 10 years, with industry warning it would be worse.
“At the same time, Labor is making new housing harder to finance and more expensive to build. Construction costs are making projects uneconomic.
“Across Australia, more than 3,400 construction firms collapsed last financial year.”
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